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Op-Ed: Best Buy/Napster/$5 – By Bob Lefsetz

You can't analyze this through the prism of Best Buy's bottom line, it's doesn't even pay to examine this as a Napster issue, what you've got to do is pull back and view this from a wide berth, encompassing music in general. Because we're on the verge of an incredible sea change, we're just about at the TIPPING POINT!

Streaming is going to rule. One day, sales of tracks will dive and streaming will be the way people listen to music.

It's been ten years since the original Napster, verging on thirty years since the introduction of the CD, soon we're going to have a generation that doesn't think of music as something physical whatsoever. It's about delivery on demand. I want to hear this cut, how do I do that?

That's what's driving MySpace, that's what even driving video views. People just want to hear the songs. If you can hear everything you want whenever you want, why do you need to own it?

Napster is a good service, in some ways better than Rhapsody. Albums are listed in order of release, how the listener thinks of them. Inventory is frequently better than Real's offering. Then again, sometimes the reverse is true. And in both cases, there are always missing tracks, absent because the labels believe this will incentivize customers to buy them. Ain't that a laugh.

I use both via my Sonos system. As for availability outside the house? Not a big issue. You see I've ALREADY got more music than can fit on any of my iPods, I can NO LONGER take everything with me… And I'm sick and tired of stealing music, it takes too much time when I've got whatever I want at my fingertips.

But Spotify is even better than Napster and Rhapsody. Because you hear the music instantly, and if you back up, you don't have to wait for the track to begin again. And Spotify is working on an iPhone app.

Give kudos to Apple. The iPhone is about crawling from the wreckage into a brand new car. Rather than worry about selling iPods, they're selling iPhones, and the iPod Touch. Now it's about apps more than music. Which is good, because just like ringtones, sales of individual tracks are going to take a dive. But people are still going to want to hear songs on the go. But they'll be listening to streams on their iPhones. Which will have apps for all these services. But don't believe for a second that Apple won't compete with them.

The interesting story is whether Apple can build a monopoly. With the iPhone! The Palm Pre is crippled upon launch, as a result of being tied to the dying Sprint. Google Android has got the same problem as Windows Mobile, no uniformity. That leaves the BlackBerry… An amazing e-mail device, a shitty Web surfer.

Just like there's one iTunes Store, will there be ONE APP STORE?

The iPhone will need to be available on all carriers, soon. And wireless broadband performance has to improve in the U.S. But if you can hear whatever you want whenever you want, why do you need to own it?

Napster's got the advantage of Best Buy, it's got a storefront to move the product, which Rhapsody does not, Real needs to be worried. But how much of a dent can Napster make? The five bucks a month delivers five crippled downloads, WMA/DRM-encrusted. So the business proposition ain't that good. And we've never been able to convince the masses to pay for subscription services. They're saddled with the word "rent", which has a bad connotation and certainly aligns with "evaporate". But Spotify starts free, and then you UPSELL!

More music

Today's announcement isn't about the viability of Napster, the impact upon Best Buy, but the breaking of the dam. The move from ownership to streaming (a much better term than "renting"). No one can compete with Apple on ownership, Amazon has proven this, even though they're almost giving away hit product. When it comes to streaming will we have multiple services? Or will you get it with your wireless subscription? And hear what you want online via Spotify.

Utterly fascinating. I'm not sure how the rights holders generate the revenue of yore, but it's great for listeners. Everything available at your fingertips!

MySpace inured listeners to streaming. YouTube seconded the effort. How many clips consist of just the song? While rights holders were debating the future, it was already happening. Mind-sets have changed. Ownership is HISTORY!